SACRAMENTO, California — How bad is California's wildfire insurance crisis? So bad that the state can't get coverage for its own firehouses.
The irony emerged at a state Senate budget subcommittee hearing Thursday in Sacramento, where Gov. Gavin Newsom's administration defended the California Department of Forestry and Fire Protection's request for $11 million to replace a kitchen at Ishi Conservation Camp, which houses and trains inmate firefighters in the remote Sierra Nevada foothills of Tehama County.
Cal Fire usually pays for building maintenance with bonds based on the value of its property, but it couldn’t for the Ishi project because it couldn’t insure the facility to underwriters' satisfaction, Finance Department analyst Victor Lopez told lawmakers.
“The insurance industry, they weren't interested in selling insurance policies in the region due to the perceived fire risk in the area,” Lopez said. And the insurer of last resort, FAIR Plan, doesn’t meet the bond underwriters' requirements, either, he added.
State senators from both parties were incredulous.
“We can't get fire insurance at a fire station that’s going to be manned by firefighters," said state Sen. Brian Dahle, a Republican from Lassen County, in the northeast corner of the state. "That's where we are in California. That to me is crazy.”
Add Cal Fire to the growing list of constituents putting pressure on lawmakers to do something to stop property insurers' exodus, which makes headlines daily as companies announce policy non-renewals or moratoriums on new coverage.
California Insurance Commissioner Ricardo Lara agreed last year to let insurers raise rates and base them on future projections of fire damages, after lawmakers punted the decision to his office. Lara has been duly handing out rate increases, but insurers are still leaving: In the past two months alone, American National announced it would leave the state and State Farm said it would drop tens of thousands of homeowners.
State Sen. Josh Becker, a Democrat from Silicon Valley, highlighted his bill to require insurance companies to give property owners more credit for things like installing fire-resistant roofs and building fire breaks. (Insurance companies oppose it, saying it could force them to take on too much risk.)
“It’s ironic and highlights the problem we’re trying to solve,” he said about Cal Fire’s insurance woes. “We’re just trying to get recognition for the direct fire mitigation on the ground.”
Ishi might be the tip of an iceberg.